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Middle Eastern giants continue to increase their weight on China.
Recently, at the FII PRIORITY Asia Summit in Hong Kong, the head of Saudi Arabia's Public Investment Fund (PIF) announced plans to open an office in Chinese mainland soon.
As the largest sovereign wealth fund in Saudi Arabia, PIF is well-known, and the chairman of the board of directors is Saudi Crown Prince Salman Jr., which is needless to say.
According to the 2022 annual report released by PIF in August this year, PIF's assets under management exceeded 2.23 trillion Saudi riyals, about US$594.556 billion, or 4.27 trillion yuan.
Since the beginning of this year, China-Saudi Arabia cooperation has been frequent, taking PIF as an example, as early as January, PIF cooperated with Futian District, Shenzhen, Shenzhen to establish Blue Ocean Taiku (Shenzhen) Private Equity Investment Fund Co., Ltd., with the first fund scale exceeding 1 billion US dollars.
And just this past December 8, the Chinese fund Yida Capital officially announced that the second phase of the fund with a total scale of 1 billion US dollars received investment from PIF.
It is not difficult to find that Saudi Arabia is turning its attention to China, and with the eastward shift of the strategy of the Middle Eastern giants, the world economic pattern is bound to undergo earth-shaking changes.
The worries of the Middle Eastern giants
If you are "so poor that you have only money left", does that mean that you don't have any troubles?
Saudi Arabia should have a say in this issue, and although oil has brought it unparalleled wealth, it has also created a dilemma of over-dependence on oil and a single national economy.
Oil is known as "black gold" and "industrial blood", as the most important raw material of modern industrial society, its strategic position determines that it is difficult for Saudi Arabia not to get rich.
But even this kind of "lying down to make money" business has been threatened in recent years:
The new energy transition is gradually emerging around the world, and in the long run, the decline of oil's status is almost inevitable.
In addition, the great breakthrough in shale oil development technology in the United States, with the upgrading of technology and the reduction of costs, is also threatening the position of Saudi Arabia step by step.
It is in the wake of such concerns that Saudi Crown Prince Salman Jr. has proposed an ambitious economic transformation plan, the Saudi Vision 2030, which aims to increase non-oil revenues to 70% by 2030.
In addition to the threat to its status as a traditional crude oil country, Saudi Arabia also faces more serious problems:
Relations with the United States, an ally and backer, are becoming increasingly unreliable.
In the past, Saudi Arabia used oil transactions to endorse the dollar, and the United States provided shelter for Saudi Arabia, but unfortunately, due to the hegemonism in their bones, the Americans only regarded Saudi Arabia as an "ATM".
When Trump was in power, he was already very unhappy with Saudi Arabia, and when Biden came to power, he directly angrily scolded the Saudis as "pariahs", and even stabbed a hornet's nest.
Eat and smash the pot, put down the bowl and scold the mother, who will have this attitude towards allies?
Since the United States is unreliable, Saudi Arabia, which is sitting on a huge amount of wealth, naturally has to find a new friend who can wrestle with the United States.
Saudi Arabia is strategically moving eastward
When it comes to these Middle Eastern tyrants, everyone's first impression may be the same:
There is money, there is money, in addition to money, there is still money.
Now these Middle Eastern tyrants want to make friends with China, and the way is simple and rude, to put it bluntly, it is to throw money.
For example, on March 27 this year, Saudi Aramco spent 24.6 billion yuan to buy a 10% stake in the mainland's Rongsheng Petrochemical, a premium of nearly half.
Don't ask why you want to spend more than 10 billion, make friends, making money is second, and feelings are first.
In order to make this friendship more sincere, Saudi Arabia announced that it would invest 12.2 billion US dollars to build a large oil refinery with a daily output of 300,000 barrels in Northeast China.
Including this time PIF to open an office in the mainland, it also means that the money is coming, this year the chief executive of the Hong Kong Stock Exchange, Aguzin, has publicly said:
"By 2030, the investment capital of Middle Eastern sovereign funds is expected to increase to $10 trillion, and more than 10-20% of investment will likely go to China. ”
In other words, Middle Eastern sovereign funds have $1 trillion to $2 trillion to invest in China.
In addition to increasing investment in China, Saudi Arabia has also turned its attention to Russia, reaching cooperation in the fields of natural gas and defense.
It is not difficult to find that Saudi Arabia is now strategically moving eastward, trying to get rid of its dependence on the United States.
Why is Saudi Arabia strategically moving east?
The most fundamental reason why Saudi Arabia can't wait to make friends with China is that it has no choice but China.
Remember the aforementioned Saudi Vision 2030?
Among them, Salman Jr. plans for Saudi Arabia's three transformation directions, none of which can be separated from China's support.
The first is to increase the value of industrial output.
In the past, Saudi Arabia was like a "big stupid man" lying on a mountain of gold:
As long as the oil is dug out and shipped out, the profit can be several times or even ten times higher, and the oil is not worried about selling, just lying down and counting the money.
However, in order to reduce the proportion of oil sales revenue, Saudi Arabia now plans to engage in "deep processing" and make an extra profit after refining crude oil into various petrochemical products.
This means that Saudi Arabia needs to have a certain industrial base and obtain technical support from outside, and China's experience in refining hundreds of millions of barrels of oil every year is an excellent help for Saudi Arabia.
The second is the development of new energy industry.
Saudi Arabia is located in the Middle East, in addition to rich oil resources, the sunshine is also abundant, so Saudi Arabia intends to develop the solar industry, by 2030, 50% of the country's power stations will be converted to solar power, by 2050 to achieve 100% solar + wind power supply.
Coincidentally, the mainland's photovoltaic production capacity is the largest in the world, and Saudi Arabia wants to do solar energy industry, which cannot do without China's help.
Finally, the development of tourism.
This is simpler, Saudi Arabia is a desert in addition to the desert, if you want to develop tourism, you can't count on the natural scenery, you can only rely on money, and Salman Jr. is ready to build a "city of the future" by the Red Sea.
And this is China's strength, which is full of experience in infrastructure, and we call it second in this regard, and no one dares to say that it is first.
Therefore, if Saudi Arabia wants to get rid of the shackles of the United States and realize its "Saudi Vision 2030", then it is inevitable that the strategy will move eastward and turn its attention to the east.
Write at the end:
Resources are both welfare and curse, and even Saudi Arabia, which is lying on the "oil gold mountain", is riddled with troubles.
However, with the change of Saudi Arabia, I am afraid that the head of the United States will hurt even more, and the global economic pattern has ushered in a major reshuffle.